The numbers and the narrative of ESG with Michael Young

[00:00:00] Qayyum ("Q"): But I would love to just get, like, an introduction of yourself. So I would describe you as like a PRN communications mogul at this point with all the different agencies you own, like with the Melee Holdings and actual agency. I remember when I was trying to prosecute you initially, I was like, this guy has a sense of everything. And with your Purpose podcast, maybe give us a little bit of overview is what I described, correct? How would you phrase that differently? And then I would love to jump into your background and you see and all of that stuff.

[00:00:27] Michael: Yeah, for sure. I appreciate the mogul title. And we just mogled up this week. Actually, it was last week, time flies. We launched a venture fund to stand up brand new agencies. So we're getting after it. So, yeah, we own three agency brands. As I said, we set up a venture fund that's mostly for global agencies, starting global agencies we've kicked off to in London. We're looking at France. We're going to Asia pack pretty soon because we have needs over there. So. Yeah. And then just by way, background been in the agency business for 20 years, worked at a bunch of big shops, a couple of small shops, but started out on my own in 2016. Awesome.

[00:01:31] Qayyum ("Q"): Well, Congratulations on your success. I mean, like you said, moguling up all the way and look forward to with all the investments in venture funds around the world, that's going to be really cool to track the progress. So obviously, we're focused on ESG here, and I'm really curious to hear from your side. First of all, what do you believe is the relationship between what you do and East G as a whole? And then after that, let's get into your background on how you got there and what that looks like today.

[00:02:05] Michael: Yeah. So it's a great question. And I think there's definitely some overlap, mostly between the numbers and the narrative. And every organization has both numbers and a narrative. They've got a business story, they've got a carbon footprint. They've got diversity, equity and inclusion goals. They've got numbers. They've got things that they're trying to do. From a business standpoint, ESG is really a measure of that in one specific realm and dimension. And then they have a narrative and they're trying to communicate what they're doing from a business standpoint, from an ESG standpoint to stakeholders into the marketplace. And that's really where what we do comes into play. Right.

[00:03:05] Qayyum ("Q"): I love that. The numbers and the narrative, that's such a powerful way to describe that, especially when we're trying to quantify qualitative aspects. Right. You need that story to weave everything together. It's such an important phrase. Yeah.

[00:03:22] Michael: Thank you. And I didn't make it up. It's actually from the book. Nyu Stern Professor, brilliant guy, wrote a book called Numbers in the Narrative, and I've been a fan ever since. The other sort of the flip side of that is what we've seen. If we just take the ESG and the purpose world for a moment. You've seen a lot of organizations get out there too far in the narrative realm and can't back it up with numbers. So that's really what the green washing purpose washing backlash is really all about, is you're out here pitching a story in a narrative which fundamentally isn't really quantitatively valid.

[00:04:12] Qayyum ("Q"): I'm glad you brought that up, because the question is going to ask you later on. But while we're here. So, yeah, obviously, Evans talking about green washing and it's green washing think washing, social washing, purpose washing, XYZ washing, whatever you call it. And as you said, it's when the narrative gets too far ahead, how do you manage that when you're working with companies? Is there a bit of a tug of war between what they want to tell to the world and what you can tell today? So curious to hear that from the inside out. Yeah.

[00:04:43] Michael: I think organizations are much most organizations are pretty disciplined right now. And again, you'll see some outliers. I think the market, the media, consumers, employees, they have asymmetric power and are truly starting to discipline organizations. Look at what's happened to Facebook most recently. Right. Where you have an employee who leaks tons of strategic information and that one individual has vast power over this organization. And I think most organizations have figured this out. Right. If they're going to fake it, they're going to get nailed. So there is a disciplining process going on. I think there's always a tendency to want to shine a light on the good and try to ignore the bad. I think that's a very human tendency. Right. That's innate in many areas of life.

[00:05:53] Qayyum ("Q"): Even down to trade. And we like to hold on to the winners and just don't tell people about the losses. Right. It's a different version of that.

[00:06:00] Michael: That's exactly right. I was Victor neaterhoffer's quote in the Education of the Speculator. He said, you can always tell the losers on Wall Street, they're always talking about their winning trades.

[00:06:12] Qayyum ("Q"): 100%.

[00:06:13] Michael: Right. Anyway, I think broadly, the news for corporations and those of us who work in the space is that we have to collapse the say, do ratio, meaning what we say we're about is what we have to do. And there cannot be a gap between those two.

[00:06:40] Qayyum ("Q"): Yeah. We think about that sometimes. Also, what they say is what we say. Right. And sometimes there's a stark difference sometimes, which is where you get an opportunity to investigate further. Yeah. Stepping back a bit. So tell us how you got into Eg, starting in PR Communications. I know you'd mentioned, I think, Cylistica, is that correct? But yeah. What does that journey look like?

[00:07:06] Michael: Yeah, sure. Well, bank of Montreal Bimo Harris was our first real entree into this world, and we were working with them on some other stuff. And they asked us to come in and provide some thinking on their purpose narrative. And so got involved in that journey with them. And then other clients quickly noticed that every organization wants to tell a story around ESG now. And the market has certainly. And by the market, I mean, everywhere you look, ESG is now front and center. And so it's a core part of the communications offering these days. I think there are specialist firms that do just that. And I think many firms, many agencies, have developed capabilities and built out practices and practice groups and are now helping advise clients on everything that goes under the broad heading. But for me, it was really a sort of a lucky break and an opportunity to work with some really great brands. And then I launched the podcast Purposeing, really to educate myself. But I also noticed that there's a real desire and a need to talk about this topic. And so the podcast has helped me do those couple of things.

[00:08:47] Qayyum ("Q"): Yeah. And you've had some great people on there. So for anyone listening, it's the Purpose Inc. Podcast, right?

[00:08:54] Michael: Correct.

[00:08:55] Qayyum ("Q"): Awesome. And tell us a little bit more about that. Like, where was the Genesis? And of course, all the speakers are awesome, but any key highlights that stick out to you from?

[00:09:06] Michael: Yeah, absolutely. Well, the starting point was back in January 2020 when I had the idea, and I remember really wanting to sort of just open up a conversational space again for myself and for people that I know so we could learn and educate and invite experts in had my first guest, my good friend Anthony Goodman, who recruits boards of directors for big companies at Corn Ferry, and he really talked very broadly about what's going on in governance and ESG. And then we just went from there. And then 2020 happened. Pandemic, George Floyd's murder, social justice movement, all of that just sort of happened while we were doing the podcast last year. And so then really everybody wanted to talk about it. And so I had Leslie Slate Brown, who had diversity for HP, and Grady Crosby, who does the same at Johnson Controls. And more recently, we've been talking a lot about what's sustainability broadly and had folks from Chipotle and the former McKinsey partner, Bruce Simpson. So we've really had a diversity of gathering. Yeah, definitely one of my favorites always Alison Taylor at NYU Stern School, who is probably the most sharp eyed critic of things going on in the ESG space.

[00:10:55] Qayyum ("Q"): And she's absolute firecracker with the stuff. Yeah, no, that's really cool. And one thing that really stood out to me from our last conversation was, I forget what you were talking about. Exactly. But what the person said back to you was something like, Corporate America is not just these guys sitting on a boardroom smoking a cigar. So tell me a little bit more about the dentist, that story and what does that mean to you? Today.

[00:11:23] Michael: Yeah. That was one of the BMO execs who runs their sustainability portfolio. He said for the most part, corporate America is not a bunch of guys sitting around in a boardroom lighting cigars with oil soaked birds. That was the quote. Right. It was like, yeah, look, I think for the most part. Well, I'll be careful. Most organizations are trying to do the right thing. There are other organizations who are saying they're doing the right thing but are lobbying for lobbying Washington and Ottawa and Brussels and every other major capital to get for deregulation, for looser labor laws and tax abatements. Right. So they may be saying one thing but doing another thing. And that's a real ethical issue and a real ethical challenge. And that's typically beyond the scope of the work that I can do for an organization. I cannot help them sort of put lipstick on that pig. Right. But that's not my job. But for the most part, organizations are trying to do the right thing. They're trying to get the numbers in the narrative to sync up. Why? Because Generationally, Gen, Z and just everyone are making decisions about brands and about companies, brands they want to buy and companies they want to work for. They're going to last generations right now.

[00:13:15] Qayyum ("Q"): Totally.

[00:13:16] Michael: Right now. And again to go back to Facebook. That's their systemic problem. Right.

[00:13:26] Qayyum ("Q"): Totally.

[00:13:27] Michael: Eventually they run out of young engineers coming out of school that want to work for them. And they know that.

[00:13:33] Qayyum ("Q"): Exactly. And on the flip side, it's also why this industry has gotten so big, because like you said, the value is based alignment and all the investment fund flows are all chasing the generational transfer of wealth. Right. And statistic of statistics and surveys have shown that this is where the new generation is headed. And we kind of have to look across the dip to get there. But you mentioned the scope of what's in control. So there's obviously something that you will do with the PRN communications elements of issues and something that you're not going to touch. And different agencies. I've talked to a few of them, some help with the report and some do purely PR and the press releases and some write the infamous 900 page, the same building reports, which I think is something for a different day that's changing quite fast. But what's within scope for your work with companies on issue?

[00:14:29] Michael: Yeah. So we are first and foremost a strategy and thought leadership firm that's really we focus on storytelling, on narrative, mostly on big picture storytelling and narrative. Right. So we do products, we do a bunch of that. But for the most part, we work with organizations that have a narrative in transition and ESG and purpose is a part of that narrative. It may be one of the pillars, one of the channels that they're trying to communicate around. We would partner on the deep technical side. We often get asked to look at a sustainability report or an annual report and bring those stories to life. There are a lot of narratives and great storylines that are buried inside of those four 3400 page reports that nobody reads. A few people read. Right. So there's gold there. And that's really what our specialty is to look at those, look at what the company is doing broadly and holistically, look at the brand, look at how they communicate, and then put an ESG or put a purpose lens on it and figure out where should they be getting more recognition for the things that they're doing and where do they need to develop a better storyline. So it isn't all everything is working and everything's great. Oftentimes we have to sort out these are the things that are your most productive, most interesting, most compelling, most data driven ESG stories. And these are the things that are still in development. And these are the things you probably from a materiality standpoint, you probably don't want to touch. Right.

[00:16:33] Qayyum ("Q"): Yeah. That makes sense.

[00:16:34] Michael: Stay away from them.

[00:16:36] Qayyum ("Q"): Yeah. And it's a crazy moving target. Right. With all the different reporting structures that keep changing and different people's expectations as the data comes into play and what they can measure what they can't, which is why we need people like you driving a high level strategy as well. So what does that look like for the future of ESG communications, like the future of the numbers and the narrative, as you put in earlier? Because I imagine what was a well in life for Sri in 2010 is very different from what our firm and how they think about communicating ESG to the public today. Right. And a year from now, I can only imagine what that's going to look like. Yeah.

[00:17:19] Michael: I think there have to be better tools and ways to align and connect and see numbers and narratives now. And I think that's keeping those two things in focus, keeping them linked and on site, if you will, is hugely important. And I think there are a lot of good people out there, well intentioned, working really hard, and the social conversation moves very, very rapidly. And so that's sometimes where we see firms making some obvious either missteps or just they're out of sync with the social dialogue. And so that can be extremely challenging. And then I think the future has to be around as everything has moved to a service or become a modular component in a larger system. There isn't this one monolithic thing. And I think organizations probably need to move away from the annual sustainability report and have sustainability as part of this AlwaysOn reporting. And you do see that in quarterly, in analyst calls and things like that. Very often you'll see ESG metrics, ESG storylines popping up in the talking points for executives. But I think it's become much more fluid, much more dynamic, and the need to be responsive to stakeholders has never been higher and again the power has shifted and again, look at what engine one has did with Exxon right?

[00:19:27] Qayyum ("Q"): 100%. Exactly right.

[00:19:29] Michael: That's the emblematic example, right. Small hedge fund activist investor flipped the script and I think we're going to see a lot more of that. Exactly.

[00:19:41] Qayyum ("Q"): The new ETFs. Right. That have activist purpose investing as their mandate was unconstrained way to do that. Now that's fantastic. I mean fluid dynamic always on sustainability. That kind of cuts cross the whole system because it does touch the whole system. Right. I know we always focus on the environmental stuff historically like majority but that's changed with the last couple of years and yeah, I think that's the future for sure especially as we move on to SAS doing things like machine automated filings of sustainability data. Right. Which historically gains have been in those reports. No, I absolutely agree. I think that's a perfect way to end that conversation because that is the vision of the future. So I think what I would love you too. Is there anything else you want to talk to our listeners or readers about and where can they find you?

[00:20:42] Michael: They can find me. Well, thank you for the conversation. I appreciate it.

[00:20:47] Qayyum ("Q"): Thank you.

[00:20:48] Michael: They can find me at actual agency. No.com, just actual agencymichael. Young at actual agency or at mby on Twitter.

[00:21:04] Qayyum ("Q"): Awesome. And I know we have a lot of care and communication firms that come and register for our application. If they want to be invested in with your new fund, what do they need to do?

[00:21:15] Michael: Just go to MXP ventures and pitch us an idea. We're taking ideas, right.

[00:21:22] Qayyum ("Q"): Open for business.

[00:21:23] Michael: Open for business.

[00:21:24] Qayyum ("Q"): It will help you get to that global domination. I like it.

[00:21:27] Michael: I like it. I like it. Thanks, man.

[00:21:29] Qayyum ("Q"): Awesome. Thank you so much for this conversation, Michael. That's absolutely fantastic. You're are so eloquent in the way that you speak the resources of the different things that you do. So it's really been a pleasure having you on and I appreciate the opportunity.

[00:21:44] Michael: Same here. I appreciate it very much and look forward to talking again.

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